Analysis: For the EU, way ahead may be a three-lane highway

BRUSSELS – Much has been written over the past year about the risks of a two-speed Europe in which the 17 euro zone countries move ahead more rapidly than the rest of the European Union.

Such a divergence, the conventional wisdom goes, could mark the beginning of an unraveling of nearly 60 years of post-war European integration and tear the EU apart.

Yet rather than having one speed, two speeds, no speed at all or being on the brink of shifting into reverse, the European Union more accurately resembles a three-lane highway.

And when EU leaders next meet at a summit in Brussels on December 13-14, it is the road ahead that will be the focus of discussions.

In the slow lane, closest to the exit ramp should it choose to swerve off, is Britain, the reluctant partner of Europe for the past 40 years.

As London mayor Boris Johnson, a potential future prime minister and former Brussels journalist, reiterated this week, Britain is in the process of reshaping its ties to Europe, with the goal being less engagement not more.

Many Britons resent what they see as interference by the European Union in issues ranging from London's standing as a financial center to the voting rights of prisoners.

For now, Britain is headed in the same direction as everyone else but in the months or years ahead it could well decide it has less to gain from being in than being out.

Beyond Britain, it's harder to pin down precisely which countries are sticking to the far-right lane (or left on British motorways), but EU diplomats asked for their views suggest at least two: the Czech Republic and Sweden.

Neither has taken the same public hard line as Britain in the debate, but in subtler ways both have shown an increasing discomfort with where the EU is headed as the push for deeper and more rapid integration gains momentum.

At the end of 2011, the Czechs joined Britain in refusing to sign up to the "fiscal compact", a treaty that enforces tighter budget discipline on member states and which the other 25 EU countries have ratified.

Sweden came close to allying itself with Britain and the Czechs on the compact and is now in the same broad camp as them on another sensitive and pressing issue - banking union.

The push to set up a unified banking structure across the euro zone and wider EU has prompted non-euro states to define their positions sharply. They are concerned about losing sovereignty over their banks if the European Central Bank, a euro-focused institution, is given sole charge of oversight.

For different reasons Britain, Sweden, the Czech Republic and a handful of others, including Hungary and Poland, are troubled by the banking framework and find themselves at odds with what they see as a euro-centric policy drive.

Such differences are visible in decisions beyond the future of economic and monetary union as well.

Next week, the European Union will be awarded the Nobel Peace Prize at a ceremony in Oslo. At least 20 EU heads of state or government are scheduled to attend, but those not going include the leaders of Britain, Sweden and the Czech Republic.

"There's no question Britain is in the slow lane and thinking about the exit," said the Europe minister of one EU country. "And I would put Sweden and the Czechs there too. They may not be about to turn off, but they are definitely going slow."

THE FAST LANE

The fast lane should, in theory, be busy with the 17 countries that share the single currency, all of them moving at the same speed as if travelling on a German Autobahn.

The picture is not so clear cut.

While a handful may be able to keep up with the pace, others are struggling. Not only are they holding up the traffic, but they could cause an accident.

After three years of the debt crisis, it's not hard to identify who they may be: Greece and Portugal for sure, and to an extent Ireland, even if it has picked up the pace.

Behind them are several others that will either be bailed out soon, have asked for assistance or may have to in the months ahead, including Cyprus, Spain and Italy.

The remaining 11 euro countries range from Germany, Finland, the Netherlands and Austria at one end of the speed spectrum to Estonia, Slovakia, Malta and Slovenia at the other, with France and Belgium hovering somewhere in between.

MIDDLE OF THE ROAD

Perhaps the most challenging place to be is the middle lane. It is difficult to work out which of the seven or so countries are about to move into the fast lane, which are drifting to the slow side and which are staying in the middle.

Hungary is a case in point. It is committed to joining the euro in the years ahead and yet has repeatedly shown British-style frustrations with where the EU is headed, particularly when it comes to banking union and justice issues.

Poland is not so hard to read, but still in two minds about the euro and when to adopt it. Lithuania wants to join the currency as soon as possible, but may not be up to speed. And Denmark is steering clear of both the euro and major parts of EU legislation, but remains a committed European.

"The middle lane is difficult because some countries are indicating left and yet drifting right," said a senior EU official involved in tackling the debt crisis, warming to the extended metaphor.

"You almost need an exit ramp straight off the fast lane, otherwise you may end up with Greece swerving across three lanes of traffic to get off the road."